Berkeley, a city of 117,000, punches above its weight culturally thanks to the University of California and a well-read population. More than a third have graduate degrees, compared with 14 percent of the Bay Area as a whole. What it lacked, thought Lance Knobel, Tracey Taylor and Frances Dinkelspiel, was a strong local news outlet. So they started one.

Berkeleyside, their online publication, is designed to fill what the three journalists called a “black hole” in Berkeley news coverage. Now Berkeleyside’s challenge is to avoid another black hole — the financial struggles of Internet media. To do so, they’re aiming to turn their readers into investors.

Knobel and Taylor, who are married, met Dinkelspiel a decade ago, not long after they moved their family from London to Berkeley; their kids went to the same school. The three became fast friends. A few years later, they became colleagues.

In 2009, they started a blog, In Berkeley, with the help of Dave Winer, a pioneer of the online medium. Soon after, readers wrote asking the team to look into gunshots they heard, street closures and City Council meetings.

“Very quickly, people wanted more,” Taylor said. “There was a hunger for more news.”

Six months later, In Berkeley became Berkeleyside, a hyperlocal news website that now has more than 250,000 unique monthly visitors and 1,200 members. The three cover daily Berkeley news with the help of senior reporter Emilie Raguso, one of five full-time employees; the site also hires freelancers.

Berkeleyside is now asking for help to add two more positions — one writer and one marketer — and to redesign its website for mobile devices. The vehicle: a direct public offering of shares. Berkeleyside is soliciting $800,000 from those willing to invest at least $1,000 for a stake in the local news business.

Such offerings differ from the far larger initial public offerings pursued by Silicon Valley tech companies because they don’t go through a major exchange like Nasdaq or the New York Stock Exchange.

Investors will get 3 percent dividends on nonvoting shares, which means Berkeleyside’s three founders will retain control of the business. They will also receive a quarterly investor newsletter updating them on Berkeleyside’s financial status and future plans.

Berkeleyside rose to local prominence after covering the Black Lives Matter movement. This year, it won an award from the Society of Professional Journalists for its coverage of homeless issues.

It’s not the first time Berkeleyside has sought support from readers. The publication’s members pay it an average of $70 annually. It also hosts an annual conference, Uncharted. The event brought in about $100,000 this year. But as is the case for most media outlets, cash is tight.

The three founders take little to no salary, said Knobel, who serves as president, estimated Berkeleyside’s 2016 revenue will be $500,000.

“The news business is a pretty tough business,” Knobel said. “We wanted to raise capital to give us a little more breathing room to hire more reporters and invest in the site.”

News organizations largely rely on advertising and subscriptions for revenue, but increased competition for digital advertising and the abundance of free information on the Web have made making money off of content more challenging.

While print media has had its own struggles, online startups like Berkeleyside face an uphill climb. One out of every 4 news startups founded since 2010 has failed, according to an analysis by UC Berkeley lecturer Alan Mutter, who teaches at the Graduate School of Journalism.

“It’s all relatively unsettled right now,” said Rick Edmonds, media business analyst at the Poynter Institute.

Some online media outlets like ProPublica and the Texas Tribune have turned to the nonprofit model, relying on a few key donors. Others solicit contributions from their audiences. Websites are also increasingly relying on what’s known as native advertising, a technique popularized by sites like BuzzFeed and Vice, among others, where advertisements are presented in a format similar to articles.

Direct public offerings are less likely to catch on in the media world because of the costs of signing up investors, but they could make sense for a local news outlet like Berkeleyside, said Kerry Rice, senior Internet and digital media analyst at Needham & Co. Having a financial stake makes readers invested in the publication and its success.

“That engagement with your local audience is great,” Rice said. “They keep coming to the website.”

Berkeley’s unique culture and affluent residents make the city a good place for a publication to experiment with this, he said.

That Berkeleyside readers are already engaged also shows promise for a direct offering, because such offerings are “almost always done by a company that has a loyal following,” said Richard Swart, chief strategy officer at NextGen Crowdfunding.

The Green Bay Packers, which first sold stock to residents in 1923, has more than 360,000 owners. It’s the only community-owned NFL team.

Ben & Jerry’s also raised $750,000 from 1,800 Vermonters in a 1984 offering to prepare for a later initial public offering on Wall Street.

“Berkeleyside is trying to tap into that same idea of engaging with a local supportive group of people engaged in your community,” Swart said.

Guillaume Pierre has lived in Berkeley for 16 years and has been a Berkeleyside reader for the past five years. He appreciates the news website’s local coverage and tweets tips to Berkeleyside monthly. Yet while Pierre is an avid reader, he says he does not plan to invest through the offering.

“I understand I’d be owning a part of this company, but you aren’t really,” Pierre said. “You aren’t taking any responsibility. You don’t have any say in what Berkeleyside does.”

Bill Newton has held a paid Berkeleyside membership for years and has considered investing. He thinks the investment has a good rate of return, but he’s not sure if he wants to invest in a news publication.

Knobel says he’s optimistic that Berkeleyside will meet its goal. It’s already a quarter of the way there, with about two dozen investors having put down $200,000 in the last month.

“They are making an investment because they think local news is critical to democracy,” said co-founder Dinkelspiel.

Berkeley is an “incredibly engaged” community with no other dedicated daily local news sites, Dinkelspiel said. She hopes the investments will enable Berkeleyside to serve the community in the long run.